Potential Death of California Stem Cell Program Hangs Over Its Performance Evaluation

The looming demise of California's $3 billion stem cell research effort dominated today's meeting of its governing board, which was told both that the agency has made "incredible progress" but needed to do better.

The occasion was the presentation of a $230,000 performance audit required by state law, a task performed by the firm of Moss Adams, one of the largest accounting and consulting firms in the world.

The firm's 38-page report targeted fund-raising, retention of staff and better utilization of board members in its recommendations for improvement and called for a more concrete plan for raising more than $200 million. Excerpts from the report can be found here and an earlier story on the audit findings here.

In its oral presentation, Moss Adams representatives had a number of good things to say about the stem cell agency, formally known as the California Institute for Regenerative Medicine (CIRM). They cited the agency's "incredible progress" and said "we usually see a lot of good things here."

It was the third go-around for Moss Adams, which has performed all three of the CIRM performance audits. (See this for links to the previous audits.) Today's presentation, however, focused more on the issues surrounding the agency's end within a few years, unless ambitious fundraising plans are successful.

The agency expects to run out of cash for new awards next year unless it is successful at raising $200 million from private contributors. That would take care of the agency's needs until a possible $5 billion bond measure might be approved by California voters in 2020.

One board member, Jeff Sheehy, also a member of the San Francisco board of supervisors, raised a number of critical questions, seeking more details about the fund-raising effort. He said there seemed to be a "lot of uncertainty" about it.

Jonathan Thomas, chairman of the agency, said a fund-raising plan is in place. He is leading the effort and being assisted by two other employees. He said some board members have been engaged and he plans to consult with all 29 board members.

David Higgins, a board member from San Diego, asked Thomas about a "double-edged sword" that could come into play because of a successful fund-raising effort. Higgins said the public might be more likely to oppose to a new bond measure if the $200 million is raised, reasoning that public funding was not needed in light of private support. Thomas said he did not think that was a major problem.

California's Stem Cell Agency Hits 45 Clinical Trials

Directors of the $3 billion California stem cell agency yesterday added another clinical trial to its portfolio, bringing to 45 the number of its forays into the late stage research that is the most likely to produce a therapy sooner rather than later.

The decision on the $5.7 million award carries more weight in terms of the viability of the agency than might ordinarily be assumed. The agency's cash is running out. It is facing its demise in less than two years unless prodigious funding raising efforts are successful.

One of those efforts involves asking California voters in the fall of 2020 for $5 billion more in bond funding. The California Institute for Regenerative Medicine or CIRM, as the agency is formally known, would dearly love to point to a therapy or cure that would resonate with voters.

Thursday's award went to Joseph Rosenthal, director of pediatric hematology and oncology at the City of Hope and lead investigator on the trial. He told the agency,

"CIRM funding will allow us to conduct a Phase 1 trial in six adult patients with severe SCD (sickle cell disease). We believe this treatment will improve the quality of life of patients while also reducing the risk of graft-versus-host disease and transplant-related complications. Our hope is that this treatment can be eventually offered to SCD patients as a curative therapy.”

CIRM directors also approved a $4 million award to Fate Therapeutics, Inc., of San Diego, a publicly traded firm that is developing a "natural killer" cell cancer immunotherapy derived from induced pluripotent stem cells.

CIRM said that the goal is to treat many patients in an "off-the-shelf manner." The firm hopes to launch a clinical trial in 2019. Fate's stock closed at $10.58 today, down one cent. Its 52-week low is $2.52 and its 52-week high $11.70.

Here is a link to CIRM's press release on the awards. Here is a link to the CIRM blog item on the matter. Here is a link to the Fate Therapeutics press release which the company posted this morning.

After 13 years, California Receives Its First Stem Cell Royalty Check

California's $3 billion stem cell agency this morning reported the first royalty check resulting from its 13-year-old research program -- a payment of nearly $200,000 from the City of Hope.

The money, however, did not go to the agency, which is scheduled to run out of cash by 2020. It went to the state's general fund and can be used for anything from smog prevention to patching up the state's freeways. 

The royalties resulted from a $5.2 million grant in 2012 to Stephen Forman at the City of Hope in the Los Angeles area. The research, now overseen by Christine Brown, involved the use of genetically modified CAR-T cells to improve cure rates of patients with "high-grade" malignant glioma, an aggressive type of brain cancer.

In an email today, Kevin McCormack, senior director of communications for the agency, described the $190,345.87 royalty check as a "little bit of history."

It was a "bit of history" that goes back to the ballot initiative campaign of 2004 that created the California Institute of Regenerative Medicine or CIRM as the agency is formally known.  Backers of the measure created what some say were unrealistic expectations that the agency would generate $1.1 billion in royalties. 

The royalty payment resulted from an agreement by the City of Hope to license the technology to Mustang, Bio, Inc., of New York City. It is a subsidiary of Fortress Biotech, Inc. Both are publicly traded firms.

The San Francisco Chronicle first reported the size of the payment, although the fact that a royalty check was coming was disclosed last summer. Joaquin Palomino wrote in the Chronicle this morning, 

"'This is an initial payment for the recognition of the potential of this therapy,' Brown said. 'If it’s ultimately approved by the FDA as a commercial product, this could be a continued revenue source' for California."

The Chronicle article also said, 

"'In order to prove that it was a good investment for California taxpayers, we are going to need to see returns in the tens or hundreds of millions of dollars, not in the hundreds of thousands,' said Bernard Munos, a senior fellow at the medical think tank FasterCures and a close observer of CIRM. 'It’s too early to claim victory, or to claim this was a great deal for the taxpayers of California."

Here is a link to CIRM's blog item on the payment. Below is a letter from the City of Hope to CIRM about how the royalty payment was calculated.

   First Royalty Payment Generated by California  State Stem Cell Agency by DavidJensen on Scribd

California Stem Cell CEO Millan on What's Missing in CIRM News Coverage

California's $3 billion stem cell research program suffers from the same sort of problem that arises at other state departments, ranging from Fish and Wildlife to Pesticide Regulation.

They are all struggling to gain the public's attention, tell their story and create support for their activities. The big difference is that Fish and Game and Pesticide Regulation are not likely to go out of business in two years. The stem cell agency, however, could well be on its way to closing its doors by then because it is running out of cash.

The California Stem Cell Report recently talked with Maria Millan, CEO and president of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. One of the topics was news coverage and how the agency is perceived, especially considering that voters may be asked to give the agency another $5 billion.

Millan was asked: What is the most "uncovered" story about CIRM, what is the "least written about?" Here is how she responded,

"I don't think people really have an understanding for what the value proposition of CIRM is as an agency. They know we're a funding agency, and I think it's best recognized for money."

Millan said that a lot of news coverage involves such things as "are you spending that money well, do you have enough oversight, do you have enough things in place to make sure that that's being done responsibly? There's a lot of focus on that."

"I think we've solved a lot of those issues and have things in place to catch issues and deal with them as they come up.... Part of it is that some of these assets didn't exist before and now we have them, and part of it is that the field has matured, and we've been positioned well to drive it."

Millan said that CIRM is "the model" for stem cell research and its funding. She said, 

"It's well-recognized that we do this very, very well. The NIH (National Institutes of Health) recognizes that we've been able in the space of stem cell regenerative medicine to do this extremely well. We have a portfolio in terms of development and our way of doing things that's unparalleled. 

"They recognize that. We're working with them to generalize this and it'll just be a two-way street in terms of benefiting for both sides of relationships."

Millan also talked about the value that her agency brings to the state, enhancing its position globally in biomedical research. She said,

"My goal is to make sure that we're responsibly sharing the knowledge, bringing things forward, because it's going to benefit California. I know that we want to make sure that we're responsible for optimizing our funds that they really support California directly, but there are a lot of things that can happen outside that will feed into us if we enable them."

Significant coverage in the mainstream media of the activities of the agency, created by voters in 2004, is rare nowadays. However, CIRM recently received some widespread attention within the state and nationally as the result of a lengthy assessment of its efforts on NPR and KQED's web sites.

The November 2020 ballot, which will include a presidential election, is the target date for the proposed $5 billion bond measure to keep CIRM alive.  Look for more intense coverage of the agency as that date nears.

(Look for more on the California Stem Cell Report on our conversation with Millan in the coming weeks.)

Millions, Billions and Babies: The 2017 Stem Cell Story from California

Cover of CIRM annual report

California's 13-year-old stem cell research program has lured in nearly $390 million in private investment this past year, an accomplishment touted in its just released annual report for 2017.

The 23-page document is chock-a-block with facts and figures about the agency along with upbeat stories about its impact on a handful of patients, young and old.

All told, one could consider the report a key marketing tool for the agency's efforts to stave off its own financial demise, now slated for just two years down the road unless a rescue effort is successful.

The $3 billion stem cell agency, formally known as the California Institute for Regenerative(CIRM), expects to run out of cash for new awards in 2019. Its survival depends on a $200 million-plus, private fund-raising effort now underway and voter approval of a yet-to-be-written, $5 billion bond measure in 2020. The agency has been funded nearly entirely by state bonds, an unusual approach for state agencies, which generally survive on year-to-year appropriations.

The 2017 annual report, which cost $34,000, lays out the case for the agency's work, from clinical trials to patient advocacy. Included is less well-known information about the private investment that

has been drawn in to match awards and to support spin-off companies.

Private investment is critical to translating basic research into therapies and cures. So far, the agency has not delivered on expectations of voters in 2004 that it would produce a treatment that can be used by the general public. But it now has invested in 44 clinical trials and hopes that a therapy will emerge that will resonate with voters.

The agency cited its impact in the private sector with a comment from Deepak Srivastava, president of the Gladstone Institutes in San Francisco.

"CIRM has funded the full pipeline of our work on cardiac regeneration—from basic discoveries, all the way to preclinical studies. As a result of their support, we established Tenaya Therapeutics, a local start-up company that launched with $50 million in Series A investment and aims to tackle heart failure."

Maria Millan, CEO of CIRM since July, said,

"If not for CIRM, many programs currently in clinical trials to address debilitating and fatal medical conditions might have stalled or have been discontinued due to lack of funding. As a result, we are seeing more partnerships and follow-on industry investment—almost $390 million this year—to  advance CIRM-funded programs.

"By investing when others are not yet ready to do so, CIRM’s partnership enables researchers to develop a value proposition that attracts follow-on investors and industry partnerships."

The annual report will undoubtedly be a key document for CIRM Chairman Jonathan Thomas this year as he seeks to raise more than $200 million in private donations to tide the agency over until a bond election in November of 2020.

But the agency has a significant, additional challenge in reaching the general public, a point noted by Robert Klein,  the real estate investment banker who led the 2004 campaign that created the agency.  He cited the "lack of communication" in the mainstream media about CIRM.

Klein told CIRM directors last fall that 90 percent of the science reporters in the media have vanished in the last 20 years. He said that science writers were once the key to telling the story of scientific research as well as illuminating the progress of the quest for stem cell cures. Today is different, he said, and a more intense effort will be needed to win support for more billions.

"We've lost our communication link," Klein said.

(CIRM's summary of its impact graphically displayed below.)

California's Stem Cell Story Gains National Attention on NPR

California's $3 billion stem cell research effort broke into national news this morning when National Public Radio (NPR) picked up a lengthy overview of the Golden State's 13-year-old program to develop therapies that could treat everything from cancer to incontinence.

While the story chronicled the pluses and minuses of the work of the California Institute for Regenerative Medicine (CIRM),  as the agency is formally known, overall the piece bolstered the agency's efforts to tell its story to millions of more persons. It could be said to fit into the category of "I don't care what you say about me, just as long as you spell my name right."

NPR says it reaches 99 million people monthly across its platforms.  Roughly 12 million of those persons are likely to be found in California, given that the state has about 12 percent of the nation's population.

The stem cell agency piece first appeared last week in California on the web site of a popular media outlet, KQED, which produces TV and radio news. KQED's syndicated California Report is expected to air a broadcast version of the story and has linked online to the longer version as well.

All of this meets the need of the agency to reach the millions of California voters who are likely to vote on a possible, $5 billion bond measure in November 2020. The agency is slated to run out of money by then and will whither away without additional cash.

While some in the media would be loath to admit it, they tend to run in packs, chasing the same stories for a variety of reasons. The widespread appearances of the article by David Gorn could well stimulate additional media coverage in the shorter term and also help to shape coverage over the next couple of years or so.

A Man Named Lucas and the Future of the California Stem Cell Agency

Lucas Lindner, photo by Cait Covers the Bases

The news last fall from a California stem cell firm was leaden and dense. Terms such as "Phase 1/2a SCiStar study" and "Full enrollment of Cohort 3 (AIS-A; 20 million AST-OPC1 cells)" littered the company's statement. 

Today the state's $3 billion stem cell agency turned the jargon into a heart-warming, human story -- the type that is critical to sustaining the life of the 13-year-old research effort, which is running out of cash.

The story involves Asteria Biotherapeutics, Inc., of Fremont, the California Institute of Regenerative Medicine(CIRM), as the stem cell agency is formally known, a clinical trial for a treatment for spinal injury and a young man named Lucas Lindner.

He is one of the patients in Asterias' clinical trial for a human embryonic stem cell therapy for spinal cord injury.  CIRM has funneled $21 million into the research. 

Writing on the agency's blog, Kevin McCormack, senior director for CIRM communications, said,

"On a Sunday morning in early 2016, Lucas Lindner was driving to get some donuts for his grandmother. A deer jumped in front of his truck. Lucas swerved to avoid it and crashed, suffering a severe spinal cord injury that left him paralyzed from the neck down."

But after the treatment, McCormack wrote,

"Lucas can now type 40 words a minute, use a soldering iron and touch his pinkie to his thumb, something he couldn’t do after the accident.

"In August of last year Lucas did something else he never imagined he would be able to do, he threw out the first pitch at a Milwaukee Brewers baseball game. At the time, he said 'I’m blown away by the fact that I can pitch a ball again.'"

Of course, there are scientific caveats and qualifications in the story. But what the tale really can do is resonate with nearly all California voters if the story ever reaches them.

Those voters are key to continuing the work of the agency, which expects to run out of state funds in 2019 and is hoping that voters will pump an additional $5 billion into the agency through a bond measure on the November 2020 ballot. (A private fund-raising effort is underway to bridge the cash gap.)

The agency has largely functioned in obscurity during the last 10 years or so. Its story is not well known by the public. And it has yet to help finance a therapy that is available to the general public. But CIRM's 44 clinical trials, including the one by Asterias, provide hope for patients and the agency.

The key lies, however, in how the story is told and how well CIRM supporters can turn mind-numbing scientific jargon and public policy issues into compelling yarns that will open both the hearts and purses of California voters.

California Stem Cell Spending: Priming a $1.5 Billion Research Influx

California's $3 billion stem cell agency this week reported on "what you may not know" about the unusual, 13-year-old research organization. 

Its "disclosure" did not deal with such matters as the fact that it is the first such enterprise in state history or that it operates outside of the purview of the governor and the legislature. Rather it dealt with, among other things, leverage -- a term used often in the real estate business to describe, for example, using  $10 to create $1,000.

In the case of the California Institute for Regenerative Medicine (CIRM), as the Oakland-based agency is formally known, it said it has created $1.5 billion in leveraged funds. It also noted that it has served as a "validator" for a significant amount of research, meaning that its awards re-assure the nervous nellies of finance about making an investment in a particular project. 

CIRM's seal of approval has led to $528 million in additional "partnership" funding for specific research, the agency said, along with more than $395 million in awards from other agencies that were built on CIRM-backed research. . 

News about the agency often focuses on stories about people and their afflictions. Those emotional tales are powerful ways to tell the CIRM story, but its less well known ventures into leverage and validation also speak to its impact, both short term and long term. 

Kevin McCormack, CIRM's senior director of communications, wrote about all this earlier this week with specific numbers and details in the agency's blog, The Stem Cellar, in a preview of the agency's annual report.

"Our goal is to do all we can to support the best science and move it out of the lab and into clinical trials in people. Obviously, providing funding is a key step, but it’s far from the only step. For us, it’s really just the first step."

CIRM does report its impact in the best possible light. However, there is little doubt that it has played an important role in "de-risking" much stem cell research and creating a friendly environment that is more likely to attract additional financing for a still young field. 

California Stem Cells, 'Rapture' and a $5 Billion Bond Measure

This past weekend brought news about a "rapturous agreement among Republicans and Democrats" to support development of new therapies by financing biomedical research with billions of dollars.

The New York Times article indicated that the rapture could have something to do with the fact that many key political leaders on Capitol Hill are "aging in place."

The piece by Robert Pear also carried implications for the $3 billion California stem cell agency, which has virtually endorsed a yet-to-be-written, $5 billion bond measure to stave off its own death.

Pear wrote on Sunday:

"For the third straight year, lawmakers (in Congress) are planning to increase the budget of the National Institutes of Health by $2 billion. In the process, they have summarily rejected cuts proposed by President Trump.

"The push for additional funding reflects a fascination among legislators with advances in fields like molecular biology, genetics and regenerative medicine, even as they wage bitter battles over just how large a role the government should play in financing health care and providing coverage."

Pear continued, 

"Why is medical research so much less contentious than fundamental issues like health insurance coverage?

"Anthony J. Mazzaschi, a lobbyist at the national organization representing schools of public health, said that 'the charisma of the cure, the hope and promise of curing disease, seems to excite members of Congress,' including some in their 70s and 80s who are 'facing the prospect of disease and disability head-on.'"

The Times piece said, 

"The challenges facing patients and policymakers were illustrated this past week when a Philadelphia company said it would charge $850,000 for a new gene therapy to treat a rare inherited form of blindness. (The company, Spark Therapeutics, said it would pay rebates to certain insurers if the medicine, given in a one-time injection, did not work as promised.)"

California's stem cell agency is running out of money. It is looking at a November 2020 ballot measure to fill its shrinking coffers with $5 billion more. But such public policy decisions involve trade-offs concerning the health of Californians.

Several questions (among others) arise theoretically and otherwise:

• Would it be better to spend $5 billion to provide much needed, immediate health care to poor Californians, including mothers and children, which could provide a quicker payoff in improved health. 
• Is it better for the state to spend $20 million to help reduce infant mortality rates in Fresno and Mendocino that are nearly twice the statewide average or give the cash instead to a stem cell researcher (and his employing institution) who can also win the cash from the NIH. 
• The impetus for creation of the California stem cell agency was based on a restriction in federal funding for human embryonic stem cell research. That restriction no longer exists, but could be restored by the Trump administration. But should California spend its billions when researchers can seek funding at the federal level? 

These are sort of bottom-line policy questions that ignore the fact that bond issues generally are used for long-lived assets, such as prisons, educational buildings, highways, etc., -- not services such as health care. The bond measure that provided the stem cell agency with its only significant cash was an historic exception.

Nonetheless, in the public's eyes the stem cell agency is all about health. As the campaign that created the agency in 2004 noted, medical problems that affect nearly half of California families "could benefit from stem cell research."

The likely cost of the therapies that are being developed in the agency's clinical trials are almost never discussed in public. Yet many are likely to be as expensive as the Spark Therapeutics blindness treatment. One can only imagine the kind of opposition advertising that is likely to surface in a campaign for a $5 billion bond measure: "Vote No on Million Dollar Cures for Billionaires!" On the other hand, that pitch might seem too harsh and blow back on agency opponents.

Nonetheless, Americans believe drug costs are too high, something that will come into play during a 2020 campaign. According a recent Gallup poll, 78 percent of the people also say total health care costs are too expensive. Drug costs have become an easy litmus test for the expense of staying healthy.

The New York Times story noted the importance of age as helping to create support for spending on medical research. California is headed for a sharp increase in the numbers of seniors in the next decade. One study is even projecting a "silver tsunami" of cancer in older patients nationally. Generally, however, older voters are considered more likely to be conservative. and may not buy into more government spending. How that plays out in California is not clear when it comes to stem cell research or the hope for stem cell cures.

Hope is one of the more powerful products of the California stem agency. Ultimately that could be the deciding selling point. But the November 2020 election is 34 months away, and much is likely to change.

$5 Billion Bond Measure: California Stem Cell Agency Sets a Course to Secure Its Financial Future

CIRM spending plan for next year and beyond. 
Educ refers to educational  grants. Discovery 
refers to basic research. Tran refers to translational, 
and Clin refers to clinical trial related awards. 
CIRM spent $213 million this year on Clin awards. 

OAKLAND, Ca. -- Directors of the California stem cell agency today virtually endorsed a plan to stave off its financial death, pinning their hopes on a possible $5 billion bond measure and a private fundraising effort to bring in an additional $222 million.

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, expects to run out of cash for new awards in late 2019 because of limits in the ballot measure that created it in 2004.

Robert Klein, who led the 2004 initiative campaign, appeared before the governing board meeting and touted the new bond proposal. The Palo Alto real estate investment banker told directors that California had a "moral imperative" to continue its stem cell work. He said,

"This is California’s contribution to the future of medicine....This is the bridge to the future of health care."

No vote was taken on endorsement of a ballot measure that has yet to be written or qualified for the ballot. But no objection was raised by board members to moving forward on what Thomas called the best option.

Under that scenario, Klein would lead a new, $5 billion initiative that would require hundreds of thousands of voter signature to qualify for the November 2020 ballot. Then it would require raising roughly $50 million to run a successful campaign, Klein told the California Stem Cell Report last month.

The $222 million fundraising effort is already underway and would continue until the end of 2019, with the expectation that it would provide bridge funding until voter approval of the new, multibillion dollar bond measure.

Klein told directors that 70 percent of California voters favor continuing funding of the agency. However, last month he declined a request by the California Stem Cell Report for a copy of the poll or the name of the firm that conducted it.

The 2004 campaign led voters to believe that miraculous stem cell cures were right around the corner. The agency has yet to help finance a treatment that is in widespread use. But it has currently invested $300 million in 26 clinical trials, the last stage before a proposed therapy can be certified for general use. Trials, however, can take years.

The agency is funded by money that the state borrows -- bonds. The authority to issue those bonds is expiring, and the agency is down to its last $269 million.

A fallback funding scenario would involve asking the legislature to place a bond measure on the ballot. There was no discussion of that today but it would involve negotiating with lawmakers and possibly making major changes in the way CIRM operates.

Prior to discussion of the bond measure, directors approved $68 million in cuts to the size of awards so that more awards could be made over the next two years. They also approved spending $270 million on awards next year, including $130 million on awards related to clinical trials, $30 million for research bridging the gap between the clinic and basic research and $10 million for basic research.

The California Stem Cell Agency, 'Lost' Opportunities and its Financial Lifeblood

A UC San Diego scientist has zeroed in on the declining finances of the $3 billion California stem cell agency, stressing that tomorrow may be the "last opportunity" for the agency to back a new approach to severe spinal injuries.

Mark Tuszynski, UCSD photo

Mark Tuszynski, director of the Translational Neuroscience Institute at UC San Diego, is
seeking $2.1 million to support his research to use neural stem cells to grow new connections through injured spinal cord. In a letter to the board, he said,

"As the present round of...funding winds down, this may be our last opportunity to develop this work to benefit the citizens of the state of California."

Tuszynski's comment could apply to almost any of the grant applications that will be submitted to the agency between now and late 2019. The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, expects to run out of cash for new awards in 2019.

Tuszynski's comment was also unusual. The public silence from the California scientific stem cell community has been, as they say, "deafening" concerning the looming demise of CIRM. Researchers have not been heard from in any real way at the four public CIRM meetings in 2017 that have dealt with the issue.

The San Diego scientist's letter is part of the agenda at tomorrow's meeting of the CIRM governing board. At the forefront of the session is once again the question of whether the agency can find a way to continue its existence at the level at which it has operated since 2004.

CIRM's financial lifeblood is money that the state borrows -- state bonds. That source was provided by voters when they created the agency with a ballot initiative 13 years ago. However, the authority to issue those bonds is expiring, and the agency needs a major infusion.

Enter Bob Klein, a Palo Alto real estate investment banker and who headed the 2004 ballot campaign. He appeared before the board last month and talked about a $5 billion bond measure on the November 2020 ballot. He is expected to appear again tomorrow. 

Also on the table will be a strategy unveiled last month by CIRM Chairman Jonathan Thomas to raise privately $222 million between now and the beginning of 2020 to keep the agency sufficiently funded prior to a bond election. The board is also scheduled to act on a proposal to cut the size of awards so that more overall can be financed.

Then there are $21 million in applications for research into matters ranging from diabetes to dementia. That is were Tuszynski comes in. CIRM's all-important grant reviewers nixed his application (DISC2-10665), giving it a score of 80. The cutoff line for funding was 85.

He is asking the CIRM board to overturn the reviewers' decision, which would be a rare event. Another two researchers are also appealing negative decisions by reviewers, who meet behind closed doors and do not have to publicly disclose their professional or financial conflicts of interest.

The other scientists are Alice Tarantal of UC Davis and Gregorio Chazenbalk of UCLA.

Tarantal's $1.1 million application (DISC2-10599) involves, she said, "total-body positron emission tomography (PET) imaging technology, which currently is only available in California."

 Her application received a score of 84. In a letter to the board, she said her research, which also involves Simon Cherry of UC Davis, would "set the stage for stem cell applications and the transformative (imaging) tools developed, tested, and successfully applied in California."

In 2018, Tarantal said Cherry will place in operation "the world's first total-body PET scanner for humans that allows all tissues and organs to be imaged simultaneously."

Chazenbalk's $2.2 million application (DISC2-10473) involves a "new population of pluripotent stem cells" known as Muse cells, which he said can be used to treat acute myocardial infarction with a "high potential rate of success."  His score was not disclosed but appears to be below 65.

Scores on the applications can be found here. Summaries of reviewers' remarks on applications can be found  by scrolling more deeply into that document. CIRM withholds the names of applicants until after its board meeting. The three "appealing" scientists' names became public record when their letters were received by CIRM.

Eleven applications were approved by reviewers and 32 rejected.

The full agenda of the meeting with additional information can be found here. The meeting is based at the Oakland CIRM headquarters with teleconference locations where the public can participate in New York City, Sacramento, Santa Cruz, San Diego, Stanford and two in La Jolla.

The meeting is being audiocast as well. Full details on all locations and the audiocast can be found on the agenda. 

The California Stem Cell Report will be covering the meeting live from Oakland and filing stories as warranted.

California Stem Cell Board to Hash Over Cuts, Future Financing Plans Next Week

Directors of the $3 billion California stem cell agency, which is facing the loss of its funding, are scheduled for one of their more consequential meetings late next week -- a session that will deal with cutting the size of awards and planning for life after 2019.

The meeting Dec. 14 will continue a discussion that began last September and that now involves a possible $5 billion bond ballot measure, a private, $222 million fundraising campaign and major  reductions in the size of awards over the next two years.

The agency projects it will run out of cash for new awards in 2019. It is financed by California state bonds but that source is drying up under the terms of the ballot measure that created the effort in 2004.

Details of what exactly will be presented next week to the 29-member governing board were not available -- as of this writing -- on the web site of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known. More information is expected to be posted in the next few days, but it is likely to resemble closely the matters discussed in late November by the directors. 

Also on tap are changes in the basic research and translational award programs and ratification of reviewer decisions on grant applications in the "Quest" program, which is aimed at development of technology that is uniquely enabled by stem cells. 

The meeting will be based in Oakland with teleconference locations where the public can participate in New York City, Stanford, Santa Cruz and San Diego. The meeting will be audiocast on a listen- only basis. More details can be found on the agenda.  Regarding the New York City site, from time to time teleconference sites have been set up out-of-state when a director is traveling.

The California Stem Cell Report will be covering the meeting live from CIRM's Oakland headquarters.

California Stem Cell Research and a 'Heart-Tugging Media Blitz'

The critical, financial circumstances of the $3 billion California stem cell agency have drawn the attention of the San Francisco Business Times. 

The newspaper, which covers the biotech industry in the Bay Area, carried a piece last week that discussed the likelihood of a $5 billion stem cell bond measure on the November 2020 ballot supported by a powerful, emotional campaign. Also covered by the Times were plans to reduce the size of the awards next year along with a brief overview of the agency's progress.

The agency is on track to run out of money for new awards in 2019 and is down to its last $269 million. But it has made a big push into clinical trials and  anticipates many more in the next couple of years.

Reporter Ron Leuty wrote,

"The potential success of clinical trials would allow backers of a new bond measure to show real-world examples of how the 2004 measure (that created the agency) paid off in an intense, heart-tugging media blitz."

Leuty keyed off  Robert Klein's appearance before the agency's directors last month. Klein, sometimes known as the father of the stem cell agency, is touting the bond measure as a longer term financing solution, but did not respond to requests from the Business Times for additional comment.

Leuty continued with quotes from Maria Millan, CEO of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known:

"Because we're running so well and have so many potential projects — and we know there are more than what we can fund — the challenge is balancing the funding to as many as possible while making sure that resources are programmed well...We'd like to continue to deliver what we are currently delivering." 

"The next couple of years what we're doing is driving that mission because we're starting to take off. In the past, it was mainly hope; now that hope is based on something tangible."

Hope and the 'Helping Patients Part': The Uncertain Future of California's Stem Cell Program

One of the big selling points of the $3 billion California stem cell agency has always been hope. And it still is. 

It is a difficult matter to argue with. Hope underpins all our lives. But no more so than with persons suffering from terrible and incurable diseases. And those are precisely the targets of the 13-year-old stem cell research effort financed by the people of California. 

Currently the agency is on a course to run out of cash for new awards in 2019, ironically a fate dictated by Proposition 71, the ballot initiative that also created the agency in 2004. The measure provided $3 billion but no further stream of income. The agency is now wrestling with a variety of possibilities to extend its life for another decade or so, including mounting a $5 billion bond measure on the November 2020 ballot. 

A stem cell researcher at UC Davis, Paul Knoepfler, today addressed those critical matters -- and hope -- in a post on his blog, The Niche. He wrote, 

"The California Institute for Regenerative Medicine, more widely known as CIRM, has accomplished big things over the course of its history of about a decade and sparked a great deal of innovation, but what does the future hold for our stem cell agency?"

Knoepfler mentioned coverage of CIRM meeting last week by the California Stem Cell Report, noting that last week's item included the phrase "withering death." Knoepfler wrote,

"I don’t see things as so bleak and remain hopeful on the agency’s future. It’s unclear how California voters will be feeling about all this in 2020, but with our stem cell agency we are just now getting to the exciting part. The helping patients part. As a past grantee myself, I know how much the funding can make impact to advance science, whether basic, clinical, or somewhere in between. 

"At the recent brainstorming meeting on the agency’s future, there were apparently some upbeat reports of voter sentiment as described by (David) Jensen (producer of the California Stem Cell Report):

"'Robert Klein, a Palo Alto real estate investment banker who ran the 2004 campaign that created the agency, told the CIRM directors of a private poll that he said showed 70 percent of Californians supported stem cell research and continued funds for the stem cell agency.'

"What do you think about our stem cell agency’s future? 

"In terms of clinically relevant science, it is at the most promising point in its history with support for loads of clinical trials. Not all of them will work out, but I’m convinced that some will and other fresh trials that could be initiated with CIRM’s new funding in the future beyond 2020 would bring more hope."

The  California Stem Cell Report welcomes your thoughts on the agency's future and its strategy for getting there. You can submit them either by clicking on the word "comments" at the end of the item or by emailing them to djensen@californiastemcellreport.com.

"Cuts," Private Fund-Raising, $5 Billion Bond Measure: Answers to the Critical State of California Stem Cell Finances?

Bob Klein explored a $5 billion bond measure at today's stem cell meeting. 
California Stem Cell Report photo

OAKLAND, Ca. -- Facing the likelihood of a slow and withering death, the California stem cell agency today edged gingerly forward on a path of "cuts" and risky fund-raising in hopes that its research results will soon generate voter support for more billions of dollars.

Two governing board committees of the $3 billion agency, formally known as the California Institute for Regenerative Medicine (CIRM), this afternoon recommended that the full board "entertain" the proposals at its Dec. 14 meeting.

The agency is down to its last $269 million and expects to halt new awards in 2019 unless additional funds are raised between now and the beginning of 2020. It has been running at a $300-million-a-year pace recently and has pumped out about $25,000 an hour, 24 hours a day, seven days a week since it started making awards in 2005, according to calculations by the California Stem Cell Report.

Today's meeting focused on both short and long term finances. The committees examined a proposal to cut its planned clinical awards by $68 million over the next two years by limiting their size. The committees also indicated support for an ambitious effort to raise $222 million privately between now and early 2020.

Longer term, directors staked their hopes on voter approval of a ballot initiative in November 2020 that could total $5 billion. Development of a stem cell therapy that would resonate with voters would be a major key to the success of that effort. The 2004 campaign raised expectations that stem cell cures were right around the corner, but so far the agency has not backed one for widespread use.

Robert Klein, a Palo Alto real estate investment banker who ran the 2004 campaign that created the agency, told the CIRM directors of a private poll that he said showed 70 percent of Californians supported stem cell research and continued funds for the stem cell agency.

Following the meeting, the California Stem Cell Report asked him for a copy of the poll. He declined to provide it or identify the firm that conducted the survey.

Klein told the CIRM board members that the agency has made "remarkable progress" and has created a "moral imperative" to continue the search for stem cell cures. He said,

"The bridge to the future is CIRM and stem cell therapies."

The now less-than-robust finances of CIRM are a product of the ballot initiative, Proposition 71, that created it. CIRM is not funded through the customary process used by most state agencies. The initiative  stipulated that CIRM would be supported by $3 billion in state bonds whose funds would flow directly to the agency and bypass the legislature and the governor. When that cash runs out, the agency is left with no other source of state funding.

Raising $222 million privately over the next two years is no small task, but deep pockets exist that may well be tapped. The Eli and Edythe Broad Foundation, for example, has donated nearly $80 million to stem cell research centers at UCLA, UC San Francisco and the University of Southern California. All three are linked to CIRM. In San Diego, the Sanford Stem Cell Consortium was given $100 million in 2013 by Denny Sanford, another billionaire. The consortium came into being after it was backed by $43 million from CIRM.

Nonetheless, competition for philanthropic cash is heated. Thomas and Klein, however, both indicated that they would collaborate on raising the $222 million, which would allow the agency to add eight new clinical awards in 2020, among other things.

The risk lies in the timetable for bringing in the cash. The agency has a relatively tight schedule for making awards --- a schedule that a major philanthropist may or may not be ready or willing to comply with.

Without more cash, the stem cell agency projected that it would wither away by 2023 as it managed a declining number of old research grants.

For more, recent articles on CIRM's current critical funding situation, see here, here, here and here.

California Tightening Stem Cell Research Belt; Size of Research Awards Targeted

The stem cell agency outlined its assessment of its current position
 in this slide prepared for today's meeting. 

OAKLAND, Ca. -- California's $3 billion stem cell agency is preparing to put the squeeze on its research awards over the next two years, cutting the caps on new grants in some areas by 50 percent or more.

It is all part of a strategy to prolong the life of the 13-year-old research effort as it fights to fulfill the expectations of voters who created it when they approved a ballot initiative in 2004. Voters provided only $3 billion in funding, however, and the agency is now expected to run out of cash for awards in 2019 unless it changes its financial ways.

Meeting here today are two key groups, the Transition and Science subcommittees of the governing board of the California Institute for Regenerative Medicine (CIRM), as the agency is formally known.

They are scheduled to wrestle with both the agency's short-term finances and the longer term effort to extend CIRM's life for perhaps an additional 10 years or more via another ballot initiative in 2020. As for next year, based on past discussions and practices it appears certain that the agency's directors will reduce the size of awards to the scientists and businesses who are often hard-pressed to find non-governmental support.

A proposal by the president of CIRM, Maria Millan, calls for reducing clinical program awards by a total of $68 million over the next two years. Here is how the cuts would work compared to the average award this year in each category.

• Phase 1 and phase 1/2 clinical trial grants would see their caps reduced from $20 million to $12 million for nonprofits and $8 million for for-profit enterprises. The average award in 2017 in these categories was $10.3 million. 
• Phase 2 trials would see their caps cut from also $20 million to $15 million for both non-profit and for-profit enterprises. The 2017 average award was $15.3 million. 
• Phase 3 trial awards, which averaged $16.7 million in 2017, would have their caps cut from $20 million to $10 million for both types of enterprises.

Millan's presentation indicated that would her proposals would allow the agency to support 24 new trials and eight trial candidates over the next two years, in keeping with a strategy of taking "more shots on goal" as the agency tries to develop a stem cell therapy for widespread use. Clinical trials, which can take years, are the last stage before a therapy is approved by the federal government. 

Millan's plan would also allot only $10 million for what the agency calls "Discovery" awards (basic research) next year (10 projects) and $9.25 million in 2019 (nine projects). Discovery awards are expected to hit $46 million this year. Education awards are expected to total $1 million this year. Next year they  would receive $750,000 and nothing in 2019. 

Key to the spending plan is the assumption that the agency could raise an additional $220 million from a variety of sources between the end of next year and early 2020. The goal of the fund raising is to bring in $55 million by the final quarter of next year. The rest would be raised between then and the first quarter of  2020. 

CIRM did not release details of its strategy for raising the $220 million. CIRM Chairman Jonathan Thomas, however, has already been on the fundraising trail and reports that he has identified a number of potential donors.

The financial plans and any changes will go to the full board for ratification at a meeting Dec. 14 here at CIRM headquarters.

The California Stem Cell Report will cover today's meeting and file reports as warranted on this web site. Below is another presentation slide from the stem cell agency. 

California Stem Cell Agency Faces Rising Cash Burn Rate; Readying for New, Multibillion Dollar Bond Attempt

Cash is flowing out the door fast at California’s $3 billion stem cell agency, which now expects money to run out for new research awards by the end of 2019 instead of the middle of 2020.

The California Institute for Regenerative Medicine (CIRM), as the agency is formally known, expects to be down to its last $269 million in uncommitted funds by end of this year. And it is working on a new plan to raise $200 million in private funds to sustain its operations through 2020.

The financial projections -- crafted as the agency faces what its leaders call a "critical stage" -- are online this week on the CIRM web site and include proposed lower caps on the size of awards in 2018 and 2019. The agency said the increase this year in the pace of funding was generated by more, higher quality research applications.

Maria Millan, CIRM photo

In documents prepared for a key CIRM meeting next Monday, Maria Millan, CEO of the agency, said her budget scenario would maintain CIRM’s “value proposition as intact as possible” while work moves forward on a proposed, multibillion dollar bond measure in November 2020. She also said enough funds would be available to “wind down” the agency if the bond measure fails.

(See here for Millan's plan and here for longer term bond funding.)

The agency was created by a ballot initiative in 2004, Proposition 71, which financed it with a $3 billion bond measure. No other significant funding was provided. The ballot campaign raised rosy expectations among voters that stem cell therapies were right around the corner.

So far the agency has not backed a therapy that has been approved for widespread use. But it is helping to support 38 clinical trials, the last stage before a therapy is approved by the federal government for widespread use. Many more trials, which can take years, are expected to be funded prior to 2020,

CIRM Chairman Jonathan Thomas, in a presentation prepared for next week’s meeting, pointed to “early successes” such as those involving work by Donald Kohn at UCLA. Thomas also cited “promising early returns” with Asterias Therapeutics’ work on spinal cord injuries.

Thomas’ proposal, in addition to private fundraising, calls for a “citizen-led” bond measure in the fall of 2020 to sustain CIRM on a more long-term basis. During next week's meeting, Robert Klein, the Palo Alto real estate investment banker who led the 2004 ballot initiative campaign, is expected to address the prospects for another initiative measure, possibly as large as $5 billion.

As back-up options, Thomas identified the possibility of asking the legislature and governor to place a bond measure on the 2020 ballot along with seeking donor funds for co-funding of specific projects.

In Millan's presentation, she said it is “essential to preserve CIRM’s value proposition to increase the probability of and the speed by which stem cell treatments can reach patients.”

The session on Monday involves the Transition and Science subcommittees of the CIRM board. The committees are expected to recommend budget and fundraising plans to be ratified by the full board at its meeting Dec. 14.

In September, the Transition group took a crack at a wider range of possibilities. The latest proposals are a refinement of what was discussed then.

Next week's meeting will be based at CIRM’s headquarters in Oakland with telephonic sites where the public can participate in La Jolla, Duarte, South San Francisco, Los Angeles and San Francisco. Public comments can be emailed to mbonneville@cirm.ca.gov. The session will also be audiocast on a listen-only basis. Instructions can be found on the agenda along with addresses for the telephonic locations.